Survey: Taxes have little effect on prices

Erin Neff

Tuesday, March 4, 2003 | 11:13 a.m.

CARSON CITY -- The Nevada Resort Association today unveiled the results of a price comparison study of seven states that indicates that taxes do not affect what consumers pay.

The study, conducted by Wells Gaming Research for the NRA, surveyed nearly a quarter of a million dollars in items and found less than 1 percent difference in cost between Nevada and six other states.

"We do not appear to be getting a break because of our low tax environment," NRA president Bill Bible said during a press conference in the Legislative Building this morning.

"This data would indicate that the pricing practice of corporations might not be passed along to the consumer," Bible said.

The study, which cost about $20,000, is designed to drum up support for a gross receipts tax on business in Nevada. The gaming industry pays a gross tax on its receipts accounting for roughly 37 percent of the state's general fund.

"There's been a lot of discussion during the current tax debate and what impact taxes have on prices," Bible said.

Richard Wells, a Reno-based gaming researcher, said the price differences throughout the Western states surveyed are "not statistically significant."

Wells surveyed Albertson's, Best Buy, Costco, The Home Depot, McDonald's, Sears, Walgreens and Wal-Mart in nine cities in seven states. Wells Fargo Bank was also surveyed in each of the jurisdictions.

In California, he surveyed prices in both Los Angeles and Sacramento and used a weighted average for the state based on population. Wells did the same in Nevada, comparing prices in Las Vegas and Reno.

Other cities surveyed were: Boise, Idaho; Phoenix; Portland, Ore.; Salt Lake City and Seattle.

The survey showed that prices in Washington state, which already has a gross receipts tax, were slightly lower than Nevada prices. Bank services at Wells Fargo were highest in Nevada and California.

"The variance patterns that we see there do not appear to have been caused by differences in business tax structures," Wells said.

On the table behind Wells was a sample of the items surveyed, from Huggies diapers to Gold Medal flour, Campbell's chicken noodle soup and a Mr. Coffee maker.

Bible emphasized that the stores and bank chosen were only picked for the survey because they are located in all nine locations and offered the same goods. He also said the stores chosen were fairly representative of the types of stores the average shopper visits, and for emphasis, Bible pulled out his Costco card.

"We're not trying to pick on anyone here," Bible said.

The survey was similar to an unscientific one conducted earlier this year by the Culinary Union in Las Vegas. In that survey, the union actually purchased items in Southern California and in Nevada to determine that pricing was not affected by a state's tax structure.

Wells' survey was conducted on pre-sales tax prices only, without purchasing items.